Skip to comments.Forward? US Wage Income (% of GDP) at Lowest Level Since 1970
Posted on 10/13/2012 9:40:27 AM PDT by whitedog57
The rise in the consumer confidence rose more than expected. Despite real GDP growth hovering barely above 1% and the crash in durable goods orders, this is indeed a surprise. Or is it another Fed induced bubble?
According to University of Michigan, consumer confidence has risen to Bush-era levels of September 2007.
Just to put it into context, I put a yellow line through the 100 level. We still have a long way to go to get to 100 from 83.1.
Here is a chart of wage income divided by GDP. Why are consumers more confident?
Perhaps consumers are reacting to The Feds driving mortgage rates down to historic low levels through QE3 ($40 billion per month purchase of agency MBS).
The Fed did produce a Hail Mary pass for the Administration by doing QEternity (or QE3-MBS). It seems to be working for consumer confidence, although mortgage lending is not increasing by much (except home equity loans again). Mortgage refinancings are increasing thanks to the Administrations 14 loan modification programs AND massive Federal Reserve intervention in the private market.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
He’s created, or bolstered a whole new class of ‘citizens’ that produce nothing, consume everything discretionary and exist soley to re-elect his ilk.
There is no value added by this class - they exist, and they cost - A LOT!
Actually it was the Great Society that started this process. He’s merely trying to accelerate it.
Problem is that the people who actually get up and go to work everyday are getting to the point where they can barely support themselves, much less all the takers.
I predict a difficult readjustment period in the future/s
I know. I was there. Obama turned it into a fine, highly accelerated artform, and it is Obama’s doing that will bring our downfall.
Readjustment? If he loses next month, you’ll see their version of readjustment - in the cities with riots and major, major violence. Count on it.
The riots won't last long. They will use up and waste their food in about 3 days and will fade away into nothing in 3 more.
Consumer confidence polls [even if they're accurate] are meaningless. Consumers don't hire labor and consumers don't spend capital to expand. Entrepreneurs do that.
And the entrepreneurs are sitting on their capital now. Consumers can spend till the cows come home and it won't grow the economy by a single dollar. Now, if Obama loses, the entrepreneurs may well change their minds about expansion, but, still, it will not be the doing of consumers.
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